Stock to buy in short-term: RITES Ltd has been under pressure on the bourses, with the PSU engineering and consultancy company losing 11% in the past one year, shedding 10% over the last six months, and falling 5% in the past three months. Despite this subdued stock performance, analysts believe the downside may now be limited and that the stock is poised for a rebound.
Axis Securities has turned constructive on the counter, naming RITES as its ‘Pick of the Week’ on the back of a strong order book, improving export momentum and expectations of a meaningful contribution from turnkey projects starting Q4FY26. The brokerage has recommended a ‘Buy’ rating with a target price of ₹271, implying a potential 10% upside over a 6–9 month horizon.
RITES shares are currently trading at ₹247.25 apiece. The PSU stock is down nearly 22% from its 52-week high of ₹316.15 recorded in June 2025, while its 52-week low stands at ₹192.30, hit in March 2025.
Axis Securities’ Pick of the Week
Buy RITES | Target Price: ₹271 | Upside: 10% | Time Horizon: 6-9 months
Axis Securities highlighted several structural positives supporting RITES’ medium-term growth outlook, with the brokerage stating that the company remains well-placed to benefit from rising infrastructure spending. The brokerage noted, “RITES continues to demonstrate strong revenue visibility backed by a healthy order book mix and improving traction across key verticals.”
Strong Order Book: Axis pointed out that RITES reported a notable pickup in orders during Q2FY26, securing over 150 new orders worth ₹851 crore, which pushed the total order book to ₹9,090 crore. This provides revenue visibility for the next 2–2.5 years. Of particular significance, 34% of the order book is from the high-margin consultancy segment, which Axis believes underscores the company’s profitability profile. Backed by a robust tender pipeline and rising opportunities within the infrastructure ecosystem, the brokerage said RITES remains well-positioned to generate sustainable long-term growth.
Export Vertical to Drive Revenue Growth: Axis also highlighted the strong performance of the company’s export business. RITES has secured export orders worth ₹1,541 crore, with export revenue contribution consistently improving since Q2FY26. Given this momentum, Axis Securities expects RITES’ overall revenue to register a 23% CAGR over FY25–FY27E, supported largely by export activity and the execution of order book items linked to overseas markets.
Turnkey Projects to Boost Sales: Turnkey projects form a substantial 46% of the company’s total order book. While revenue from this segment has dipped recently due to most projects being at early stages of execution, Axis Securities expects these projects to gradually transition to advanced stages beginning Q4FY26, driving a meaningful pick-up in revenue. The brokerage believes turnkey execution will become an important catalyst for RITES’ top line in the coming quarters, especially as orders move from design and planning to physical implementation.
Outlook and Valuation
Axis Securities remains optimistic, citing the company’s strong fundamentals. RITES maintains a robust balance sheet, strong return ratios, and a consistent dividend track record. With favourable growth opportunities across consultancy, exports, and turnkey divisions, Axis expects the company to deliver Revenue/EBITDA/PAT growth of 23%/24%/21% CAGR over FY25–FY27E.
On valuations, the stock currently trades at 21x FY27E EPS, a level Axis believes leaves room for upside given improving execution visibility and margin support from the consultancy portfolio.
RITES Q2 Results
RITES reported a 34% year-on-year (YoY) increase in its consolidated net profit to ₹98 crore in the second quarter of the 2025-26 financial year (Q2 FY26). In the same period last year, the company had posted a profit of ₹73 crore. The PSU’s revenue from operations rose 1.48% YoY to ₹549 crore during the quarter, compared to ₹541 crore in the September quarter of FY25.
At the operational level, earnings before interest, tax, depreciation and amortisation (EBITDA) stood at ₹130 crore, marking a 22% YoY jump from ₹106 crore in the year-ago period. The company’s EBITDA margin expanded to 23.64% in Q2 FY26, up from 19.67% in Q2 FY25.
Along with the results, RITES also declared a second interim dividend of ₹2 per share, representing 20% of the company’s paid-up share capital for FY26. The record date to determine eligible shareholders was set as Saturday, November 15, 2025.
Established in 1974, RITES is a Navratna Central Public Sector Enterprise under the Ministry of Railways. It is a multidisciplinary engineering and consultancy organisation offering a wide range of services—from concept to commissioning—across various transport infrastructure segments and related technologies.
Disclaimer: The views and recommendations made above are those of individual analysts or broking companies, and not of Mint. We advise investors to check with certified experts before making any investment decisions.
